ACTION REQUESTED
[14718]
May 13, 2002
TO: INTERNATIONAL COMMITTEE No. 37-02
RE: SINGAPORE PROPOSES CHANGES TO SUBSTANTIAL SHAREHOLDER
REPORTING RULES
On May 9, 2002 Singapore’s Company Legislation and Regulatory Framework
Committee published for public consultation a report proposing a number of changes to
Singapore’s Company Legislation that the Committee expects to submit to the government for
enactment. The proposed revisions include changes suggested by the Institute to the
substantial shareholder reporting rules. A copy of the Committee’s report is attached. This
memorandum highlights several of the proposed changes.
Disclosure of Substantial Shareholdings
The Singapore Companies Act requires an investor holding voting shares of a listed
Singapore company to disclose its holdings upon attaining five per cent or more of the voting
shares. Thereafter, the investor must make supplemental disclosures for every change in
ownership within two days of the change. For the purpose of reporting, a parent company
must aggregate the holdings of its subsidiaries in determining its interest in the company.
On July 20, 2001 the Institute submitted a letter to Singapore’s Ministry of Finance
asking that Singapore modify the rules to address the burdens placed on institutional investors.
Specifically, the Institute recommended that institutional investors be required to make
supplemental filings only after reaching a subsequent threshold or upon holdings changing by
at least one percent, that the two calendar day period for filing be lengthened, and that
institutional investors not be required to aggregate holdings if related money managers
independently exercise voting and investment powers.
Recommendation 5.5 of Chapter Five of the Committee’s report recommends that
changes in shareholdings be reported when the shareholding exceeds discrete one percent
thresholds above the initial five percent threshold, e.g. six percent, seven percent, etc. The
Committee’s report also recommends that the time for filing reports be extended to two market
days. The report does not incorporate the Institute’s suggestions with respect to aggregation.
2
Extension of Safe Harbors for Exempt and Private Offerings to Collective Investment Funds
Among the various other matters covered by the Committee’s report is another
recommendation that may be of particular interest to Institute members. Recommendation 2.3
of Chapter Two of the Committee’s report would make clear that collective investment schemes
generally would be able to take advantage of the safe harbors for exempt and private offerings
under Singapore law unless the public interest would clearly dictate otherwise. This
recommendation is intended to make available to collective investment schemes, which might
be organized as trusts or limited partnerships, the full range of exemptions available to issuers
of shares and debentures.
* * * * *
The Institute is considering filing a comment letter on the foregoing proposals and any
other matters in the Committee’s report of importance to Institute members. Please provide any
comments you have to Mary Podesta at 202-326-5826 or Podesta@ici.org by June 15.
Mary S. Podesta
Senior Counsel
Attachment (in .pdf format)